The famous number 28 tram, winding its way through the narrow streets of the Portuguese capital, is packed.
Foreign tourists are flocking to Lisbon, as well as the southern coastal Algarve region -- and that's just the shot in the arm that the crisis-hit country needs.
"In the
past few months tourism in Portugal has seen its biggest growth in recent years," said Economy Minister Antonio Pires de Lima of the nearly 10-percent increase.

In the first half of the year alone, the income generated by foreign tourists grew 8.2 % to 3.7 billion euros ($4.9 billion).

There were 3.8 % fewer visitors from neighbouring Spain, which has also been hard-hit by the economic crisis.

More than making up for that however was the growing number of Americans, Germans and French visitors (up 16.8, 14.0 and 10.8 percent respectively).

Christian Fievre, a retired craftsman from the French city of Orleans, strolled with his wife Maryse down the capital's magnificent Avenida da Liberdade, a wide boulevard divided by a pedestrian pavement with gardens.

"We hesitated between Barcelona, Rome and Athens, but Greece is struggling," he said. "Here, you don't get the feeling of being in a country in crisis.

"They are going to get through it, these are hard-working people who never complain," he added. "Travelling here is a way of helping them."

Tourism, accounting for 9.2 % of GDP, "is the sector that has most contributed to getting Portugal out of the crisis," said Adolfo Mesquita Nunes, a junior economics minister in charge of tourism.

After two and a half years of recession that has wiped about 5.0 % off GDP, Portugal moved back into growth in the second quarter with an expansion of 1.1 %.

The flow of tourists into the country gave a boost to the national airline TAP, which in August carried 1.11 million passengers, the highest monthly figure they have registered.

Things are also looking up in the hotel industry.

"We registered between five and 10 % more clients than last year, mainly from the United States, France and Germany," said Carlos Jesus, co-manager of the Albergaria Senhora do Monte hotel, perched on one of the seven hills of Lisbon.

The four-star hotel, which offers spectacular views of the white-and-ochre buildings below and Tage river, is a favourite with celebrities such as John Malkovich. In terms of takings however, it still has some way to go before it gets back to the boom years.

Prices down

In all, 3.6 million foreign tourists visited Portugal in the first half of the year, an increase of 8.1 %.

The country had been the beneficiary of unrest in other, previously popular tourist destinations such as Egypt and Tunisia, Frederico Costa, president of Turismo de Portugal, told AFP.

"Security has played an important role," said Costa, whose organisation has the job of promoting tourism in his country. "We have picked up tourists who abandoned these destinations."

Costa said that lower prices, a factor many visitors cite when explaining why they were tempted to visit, is not the most decisive criterion -- especially given that room rates in the hotels are beginning to rise again.

Portugal is not comfortable with attempts to label it a "low-cost" destination: it has developed luxury hotels, built a reputation as a golfing destination and has also worked to promote cultural tourism.

Eating out won't cost you an arm and a leg, however.

"Portugal is cheaper than Japan," said Masako Matsuda, an insurance company employee who made the 17-hour flight over from Osaka.

"You eat well and the portions are enormous," he added. And then there the little local delicacies, such as the pasteis de nata, little egg-custard tarts in a thin, crackly pastry.

The beautiful beaches along the Algarve have also enjoyed a revival: visits from British, French and German tourists were all up (10.4, 37.9 and 21.8 % respectively).

But Eliderico Viegas, president of the AHETA, Algarve's hotel association, added a cautionary note.

"Rates of occupation have certainly increased, but the takings don't necessarily follow," he said. "Prices are lower and the tourists are spending less."